Emerging Asia GDP to post stronger 3.9% growth in '09 - ADB

22 September 2009 06:39  [Source: ICIS news]

SINGAPORE--The Asian Development Bank (ADB) nudged up its growth forecast for emerging Asia this year to 3.9% from 3.4%, citing better-than-expected resilience exhibited by China and India.

In its Asian Development Outlook (ADO) 2009 report released on Tuesday, the multilateral institution also turned a bit more optimistic on the region’s prospects next year, projecting a 6.4% economic expansion from a 6.0% forecast in March.

"Despite worsening conditions in the global economic environment, developing Asia is poised to lead the recovery from the worldwide slowdown," said Jong-Hwa Lee, chief economist at ADB.

Lee, however, warned against hasty withdrawal of stimulus packages that “can degrade the region’s ongoing recovery”.

The upward adjustment in growth forecast was notable in East Asia to 4.4% this year from 3.6% previously, much of it was due to China’s strength, the ADB said.

China, the region’s largest economy and the world’s third biggest, should be able to pull an 8.2% GDP growth this year and clock a faster 8.9% clip in 2010, based on ADB’s new projections.

In March, ADB was forecasting China to grow 7% this year and 8% next year.

South Korea would experience a shallower contraction due to the fiscal stimulus measures its government has implemented.

The economies of Hong Kong and Taipei, on the other hand, would shrink sharply due to weak imports, the ADB said.

South Asia’s prospects were also better than what they used to be back in March.

ADB projects a faster growth of 5.6% for South Asia from 4.8% forecast previously as five of its eight subregions were upgraded.

“The subregion's limited reliance on trade partly shielded it from the adverse effects of the global slump,” the ADB said.

ADB expects India to manage a 6.0% expansion this year, up from the previous forecast of 5%, given “emerging signs of a recovery in private business confidence and a continued large fiscal stimulus.

“Bleaker prospects are projected for the Maldives, on account of weak tourism receipts, and for Pakistan and Sri Lanka due to tight domestic demand and the weak global economy,” the multilateral institution said.

The outlook for southeast Asia, on the other hand, turned grimmer, with growth of only 0.1% being projected from 0.7% previously.

“The more positive outlook for Indonesia and Viet Nam failed to offset the deteriorating prospects for the more open (Malaysia and Thailand) and smaller (Brunei Darussalam and Cambodia) economies in the subregion,” the ADB said.

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By: Pearl Bantillo
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